Gold’s All-time high just the START of next Bull Run

Back at the end of October we wrote to the importance of the so called ‘triple top’ in the gold price that “never fails”. On Friday night we got the demonstrable confirmation of this with gold smashing through to hit an all-time high gold spot price of USD2,074 and AUD3104 in Aussie dollar terms.

BREAKING NEWS - Gold surged over $100 on open Monday morning through a combo of outstanding orders from Friday after trade and escalating tensions in the Middle East.

That article, headlined “Why THIS could be the start of the next gold bull run”, spoke to gold taking off against the reliable “triple tops never hold” setup. Those cashing out lately, at near all-time highs, simply aren’t zooming back a little nor looking at the fundamentals behind this latest rally. The chart presented in that article tells that picture very clearly. What looks like to those zoomed in as the top of the market, looks increasingly like the start of the next bull run to those looking at the bigger (literally) picture.

We have been saying now for some time that whilst everyone is looking at the ‘higher for longer narrative’, they are missing the fact that central banks and governments simply CANNOT afford to see that happen whilst carrying the record amount of debt in the system now. They MUST at some stage soon ease conditions and increase global liquidity to service all that debt. Critically, we wrote of gold’s near perfect correlation with global liquidity here. Friday night’s gold rally came off comments from the Fed chair, Jerome Powell, that left the market in little doubt that their tightening is done, next stop, easing.

The author of the chart above, Crescat Capital’s Tavi Costa, tweeted late last week the following chart that puts the current “top” into perspective and includes an absolutely compelling list of reasons why this is the START of the next bull run, not the top of the last. He was just 2 days early for the all-time high. The chart takes us back to 1970, including the end of the gold standard and gold’s subsequent role of real money amid the greatest credit cycle in history that the de-pegging started.

Lets repeat that chart on its own so you can more easily read it as it is a masterclass in what is driving gold investment.

So whilst sellers now may be thinking they are ‘selling high’ having ‘bought low’ 10 years ago, history tells us this bull cycle is only now about to take off from that low in late 2015.